PRESS RELEASE FOR IMMEDIATE RELEASE September 9, 2005 Grenada Announces Exchange Offer St. George’s, Grenada: Grenada announced today that it has commenced an offer to exchange new U.S.$ and E.C.$ bonds for a substantial portion of its external and domestic bonds, commercial loans and guaranteed debt. Grenada was forced to suspend payments on most classes of its existing indebtedness at the end of last year as a consequence of Hurricane Ivan. Grenada’s bilateral creditors are being asked to provide comparable debt relief. The claims eligible to participate in the exchange offer (which are denominated in both U.S. and E.C. dollars) are in aggregate equal to approximately U.S.$275 million. Grenada was devastated by Hurricane Ivan, which struck the country in September 2004. The total damage to Grenada is estimated to be in excess of E.C.$2.4 billion, more than 200% of Grenada’s 2003 nominal GDP. Nearly 90% of the houses in the country (approximately 28,000 houses) were damaged, of which approximately 30% were so badly damaged that they required complete replacement. On July 14, 2005, just ten months after Ivan, as Grenada continued to rebuild, Hurricane Emily, a storm with sustained winds of 90 miles (145 kilometers) per hour, passed directly over Grenada. Emily exacerbated the severe losses suffered as a result of Hurricane Ivan and struck the few areas left relatively undamaged by Ivan. Total damages inflicted by Hurricane Emily are estimated to be approximately E.C.$140 million, or more than 12% of Grenada’s 2004 nominal GDP. The new securities being offered in exchange are described in an offering memorandum dated September 9, 2005. For each eligible claim tendered in the exchange offer, holders will receive new bonds with a principal amount corresponding to the tendered principal amount of such eligible claim together with accrued but unpaid interest thereon. All U.S.$ denominated claims will be offered new bonds denominated in U.S.$ and all E.C.$ denominated claims will be offered new bonds denominated in E.C.$. The new bonds being offered by Grenada will mature in 2025 and have coupons that will increase over time from 0.85% to 8.00% per annum. Grenada does not intend to pay any non-tendered eligible claims unless resources become available to do so. The Government may decide, however, to continue normal debt servicing of domestic commercial loans and certain domestic bonds to the extent that the Government concludes that failure to do so could destabilize the financial sector. Representatives of Grenada plan to make a presentation on Friday, September 16, 2005 in Port of Spain, Trinidad and Tobago to describe the exchange offer in greater detail to creditors. The New U.S.$ Bonds will be issued pursuant to an indenture with JPMorgan Chase Bank, N.A., as trustee for the holders, and will be governed by the laws of the State of New York. The New E.C.$ Bonds will be issued pursuant to a fiscal agency agreement with the Eastern Caribbean Central Bank, as fiscal agent of Grenada, and will be governed by the laws of Grenada. A holder of 9.375% Notes due 2012 desiring to participate in the exchange offer must submit, or arrange to have submitted on its behalf, a duly completed letter of transmittal to the exchange agent. A holder of any other eligible claims desiring to participate in the exchange offer must submit, or arrange to have submitted on its behalf, a duly completed letter of acceptance to the exchange agent. The deadline (unless extended by Grenada) for holders of eligible claims to deliver completed letters of transmittal or letters of acceptance is October 7, 2005. Grenada has engaged Bear, Stearns & Co. Inc. to act as dealer manager in connection with the exchange offer. Questions regarding the exchange offer may be directed to Bear, Stearns & Co. Inc., Global Liability Management Group, at 1-212-272-5112 (call collect). JPMorgan Chase Bank, N.A. will be acting as the exchange agent. Copies of the Offering Memorandum and the Letter of Transmittal and Letter of Acceptance may be obtained from the information agent, D. F. King & Co., Inc., at 1-212-269-5550. * * * * This announcement is not an offer or a solicitation of offers to exchange any securities. The exchange offer is being made solely by the offering memorandum referred to above. The distribution of materials relating to the exchange offer, and the transactions contemplated by the exchange offer, may be restricted by law in certain jurisdictions. If materials relating to the exchange offer come into your possession, you are required by Grenada to inform yourself of and to observe all of these restrictions. The materials relating to the exchange offer do not constitute, and may not be used in connection with, an offer or solicitation in any place where such exchange offers or solicitations are not permitted by law. The new U.S.$ bonds and the new E.C $ bonds have not been and will not be registered under the U.S. Securities Act of 1933, as amended, or the securities laws of any other jurisdiction. The new U.S.$ bonds and the new E.C.$ bonds will be offered in the United States only to qualified institutional buyers (within the meaning of Rule 144A under the Securities Act) and to persons outside the United States in reliance upon Regulation S under the Securities Act.
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